Extension Connection

Extension Connection

Resolve to Tackle Financial Tasks in 2012

January 6, 2012

Photo of Kathy Sweedler

Kathy Sweedler
Extension Educator, Consumer Economics
sweedler@illinois.edu

Happy New Year! Time passes quickly these days. Even when I know that something is important to do, it's easy for me to let it slip by. However, a to-do calendar helps me get tasks accomplished.

Research shows that we tend to only put a few hours a year into planning our finances. This year I challenge you to add financial tasks to your to-do calendar. Mark out time once a month to tackle your finances. Think about how good you'll feel in January 2013 when you review your resolutions and can say, "My financial life is in better shape."

Consider adding these 12 financial tasks to your calendar. Many of these can be done in less than an hour. You can download free worksheets and find links to helpful websites to help you with these tasks at http://web.extension.illinois.edu/cfiv/ce.html .

Write your financial goals. Where do you want to be in a year, 5 years and 20 years? How can your money help you get there? It's much easier to manage our day-to-day spending when we are motivated to work towards long-term goals.

Save money. Everyone needs savings to deal with unexpected expenses and deal with the bumps in life. If you already have a savings account, consider increasing the amount you save for retirement.

Talk with family members about money. Do you have family members who need to plan for long-term needs? The website, "Long-Term Care: Talking, Deciding, Taking Action" at www.longtermcare.illinois.edu has suggestions on how to start this conversation.

Decide if you are comfortable with the amount of debt you have. If you're worrying about the amount of debt, that's one signal that you may have too much debt. Comparing your total monthly debt payments to your monthly take-home pay is another way to evaluate your debt load. "Decide How Much Credit is Too Much," posted at the above website can help you evaluate your debt load.

Do an energy audit for your home. An energy audit can pinpoint home energy efficiency improvements that payback year after year. Contact your local utility company for assistance. Sometimes local funds can help pay for the audit; Urbana residents should call 866-838-6918 and ask about the ActOnEnergy program.

Rebalance your investments. We need an appropriate mix of types of investments to meet our needs. Does your mix still match your desired portfolio in terms of liquidity, growth, and income? If not, you may need to take steps to rebalance these investments. You may find the "Asset Allocation Analyzer" worksheet helpful for this task.Calculate your net worth for a snapshot picture of finances. Add up the market value of all your assets (what you own) and subtract your liabilities (what you owe others); this is your net worth. Do this the same time each year to measure your progress towards saving for retirement.

Update the security of your smart phone and/or computer. Many of us conduct financial transactions with our smart phones or computers. Smart phone browsers and financial institutions provide security to minimize the potential of computer hackers accessing your account. However, make sure that your phone or your banking app is password protected. That way if you lose your phone, someone else can't access your account. For further security measures, your individual banks and/or cell phone carriers should be consulted.

Review your insurance plans to see if any adjustments in coverage levels or who is covered needs to be updated.

Check your credit report for accuracy. One of the best ways to catch identity theft is to check your credit report. You can check your report from the three main credit bureaus for free, once a year, at www.annualcreditreport.com

Update financial documents such as wills, power of attorney, and health directives to meet your current needs.

Increase your financial knowledge. Explore new ways to learn about finances through blogs, Twitter (follow me @morethancoupons), and other news sources.

Several of these financial tasks will be on my to-do calendar in 2012. Taking time to manage finances can help decrease stress and achieve long-term financial security. You can do it too!

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